The economy of Malaysia

The economy of Malaysia is a newly industrialized market economy. It is the third largest economy in Southeast Asia, after Indonesia and Thailand, and the 35th largest in the world. The economy is largely driven by exports of electronics, petroleum, rubber, palm oil, and wood products. Malaysia has a GDP of $369.8 billion (nominal) and a GDP per capita of $10,837 (nominal). The unemployment rate is 3.1%. The currency of Malaysia is the Malaysian Ringgit.

How does Malaysia regulate financial markets?

Malaysia regulates its financial markets through the Securities Commission Malaysia (SC). The SC is responsible for the regulation of all aspects of the capital markets in Malaysia, including the regulation of securities, futures, and other derivatives, and the regulation of market intermediaries. The SC also oversees the listing of companies on the Bursa Malaysia, the country’s stock exchange. In addition, the SC works with other government agencies to ensure compliance with the country’s financial regulations.

How to register a company in Malaysia?

1. Choose a Company Name: The first step in registering a company in Malaysia is to choose a unique name for your company. The Companies Commission of Malaysia (SSM) requires that the name of the company must not be identical or similar to any existing company name. 

2. Prepare the Memorandum and Articles of Association: The Memorandum and Articles of Association (M&A) is a legal document that sets out the rules and regulations governing the company. It must be signed by all the shareholders of the company.

3. Submit the Application to the Companies Commission of Malaysia (SSM): The application for registration must be submitted to the Companies Commission of Malaysia (SSM) along with the M&A, a list of the company’s directors and shareholders, and the prescribed registration fee. 

4. Receive the Certificate of Incorporation: Once the application is approved, the Companies Commission of Malaysia (SSM) will issue a Certificate of Incorporation. This certificate is proof that the company is legally registered in Malaysia. 

5. Register with the Inland Revenue Board (IRB): The company must also register with the Inland Revenue Board (IRB) in order to obtain a tax identification number. 

6. Obtain a Business License: Depending on the type of business activity, the company may need to obtain a business license from the relevant local authority.

Taxation in Malaysia

Taxation in Malaysia is governed by the Malaysian Income Tax Act 1967 (ITA). The ITA is the main legislation governing taxation in Malaysia. It provides the legal framework for the assessment, collection and enforcement of taxes in Malaysia.

Taxes in Malaysia are divided into two categories: direct and indirect taxes. Direct taxes are taxes imposed directly on individuals and corporations, such as income tax, property tax, and corporate tax. Indirect taxes are taxes imposed on goods and services, such as sales tax, service tax, and excise duty.

Income tax is the most important direct tax in Malaysia. It is imposed on the taxable income of individuals and corporations. The taxable income is calculated based on the total income of the taxpayer, minus any allowable deductions. The income tax rate for individuals is progressive, ranging from 0% to 28%, while the income tax rate for corporations is a flat rate of 24%.

In addition to income tax, property tax is also imposed on the ownership of land and buildings. The property tax rate is based on the value of the property and is generally between 0.5% and 5%.

Indirect taxes are imposed on goods and services. The most common indirect tax in Malaysia is the sales tax, which is imposed on the sale of goods and services. The sales tax rate is generally between 5% and 10%. Other indirect taxes include service tax, which is imposed on certain services, and excise duty, which is imposed on certain goods.

In addition to the taxes mentioned above, there are also other taxes such as stamp duty, capital gains tax, and inheritance tax.